Payroll tax cut expansion would net $600 for ave. NY family

The average New York household would pay $600 less in payroll taxes next year under a proposal being pushed by Senate Democrats.
A family earning the state’s median income of $54,554 already will pay $1,090 less this year under a 2-percentage-point reduction in payroll taxes that began in January.
That tax cut expires at the end of this year, but Senate Republicans announced this week they will back a one-year renewal.
“It’s a huge step in our direction that they are now saying they want to support this kind of payroll tax cut,’’ New York Sen. Chuck Schumer said in a conference call with reporters Wednesday.
But Senate Republicans aren’t supporting President Barack Obama’s proposal to cut the payroll tax in half – by 3.1 percentage points – next year. Obama also wants to cut employers’ share of payroll taxes if they hire new workers or give employees raises.
The White House said Wednesday the proposals would provide a $12.8 billion cut in payroll taxes for 10.3 million New Yorkers in 2012, compared to $7.8 billion this year.
Nationwide, it would provide $179 billion in tax relief next year, the administration said.
Senate Democrats want to offset the cost of the tax cut package by enacting a one-year, 3.25-percent income tax surcharge on millionaires, but Republicans oppose that.
Republicans released a plan Wednesday that they said would cover the cost of renewing the 2-percentage-point payroll tax cut for one year while reducing the deficit by $111 billion.
The plan would freeze salaries of federal civilian workers for three years, reduce the federal workforce over time by 10 percent—or 200,000 employees—and begin means testing for federal benefits such as health care, unemployment benefits and food stamps.
“Republicans will put aside their misgivings and support this extension,’’ Senate Minority Leader Mitch McConnell of Kentucky said Wednesday, prior to the release of the GOP plan. “Not because we believe, as the president does, that another short-term stimulus will turn this economy around, but because we know it will give some relief to struggling workers out there who continue to need it nearly three years into this presidency.”
Schumer, who’s pushing for passage of Obama’s plan, released county-level data comparing the impact of the payroll tax cut now in effect to the larger one proposed by Democrats.
In Westchester County, where the median income is $77,057, the difference is $848 ($1,541 compared to $2,389).